Saturday, May 24, 2014

Allotting Retirement Plan Assets in a Divorce Settlement

By Phillips, Howard


The 1st or 2nd most valuable asset in a marital estate is the benefits/accounts that one or both married partners have accrued during their marriage. Properly dividing these benefits/accounts in a divorce requires that each of the parties, and their advisors, be fully informed as to how and when that division should be arranged .

"DIVIDING RETIREMENT PLAN ASSETS IN A DIVORCE" - a clear and concise guide about how to properly apportion retirement plan assets in a divorce - is now available. This booklet/e-book provides crucial information for:



1. The divorcing parties, making certain that each receives his/her rightful portion of retirement plan benefits/accounts.
2. Their attorney, supplementing their discussion with their clients in connection with all of the retirement plan benefits/accounts sharing choices needing review .
3. Their accountants, as they delineate the assets in the marital estate to be shared .
4. Their financial advisors, regarding the investment considerations that will be applicable to the division of retirement plan assets, especially with reference to the IRA Rollover that may result from that division.
5. Pension advisors, who may use the guide as a tool to offer to prospective clients and client referral sources in connection with possible plan benefit/account valuation and QDRO preparation work.

(NOTE: A 2013 United States Supreme Court decision, and the follow-up rulings by the governmental agencies involved in regulating retirement plans, brings same gender marriages and spouses into the world of retirement plan benefit/account sharing in a divorce proceeding . The State where the marriage was performed determines the legitimacy of the marriage, not the State of domicile.)

There are a wealth of reasons why the division of retirement plan assets needs to be carefully considered. For instance, many marital unions begin with one or both parties having been employed for some time, where that employment provided for participation in a retirement plan. Therefore, the portion of the retirement plan benefit or account that built up during the marriage did not begin at zero dollars . There are several approaches to determine how to eliminate, or partially reflect, the portion of the benefit or account to be divided which is attributable to the pre-marital years.

Moreover, a serious deliberation is required with regard to the assorted ways to apportion the retirement plan assets between the divorcing parties. If we know the worth of the retirement plan assets, do we just offset it against one or more of other marital assets? Or, do we distribute the shares now, later, or at some other point in time?

Finally, some very special issues typically arise in reviewing the marital assets attributable to retirement plan assets. These include, but are not limited to, retirement plan funds that were previously distributed to an IRA for one or both parties; retirement plan monies that were borrowed during the marriage; and special bonus retirement benefits provided.

The paperback/e-book "DIVIDING RETIREMENT PLAN ASSETS IN A DIVORCE" is a comprehensive resource for divorcing parties, and their advisors, to help answer all of the above questions, and more.




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